I came across a what I think is good deal in Chicago and I have a simple question that I do not really know the answer to:
If I purchase a property cash, how soon can I do a cash out refi?
Is it as simple as ordering an appraisal with the bank and cashing out?
Wish I could give you advice on this one but I don't know. Interested to hear the responses on this one ....
It depends on the bank, and on how much $ you want to get out. Some banks will only lend a percentage of the purchase price for the first 12 mos, but after that they will lend a percentage of a new appraised value. For others the seasoning period is shorter, like six months. Maybe some of the other Chicago area folks will have some lender suggestions for you
@Al Turner - banks have a seasoning period. Typically is it 12 months or 6 months if extensive rehab work is completed. During the seasoning period you can only get a loan on what you paid for it. Typically 75% LTV for a NOO property. The lending requirements for a refi are the same as a purchase so you will still be held to the normal credit / DTI / Reserves requirements.
Fannie Mae and Freddie both allow you to refi for your cash purchase price and accusation funds before 6 months....this is no financing on the subject property.
You can do a no cash out refi (pay off existing loans) after 4 months using a new appraisal.
You can do a cash out refi after 6 months, going off the new appraisal.
Talk to local brokers who also invest and they can find lenders that will fund these loans.
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